BSA Details US Economic Impact of Chinese Market Barriers in ITC Testimony

Jun 15, 2010, 11:04 ET from BSA

Robert Holleyman Highlights Ripple Effects of $7.6B in Chinese Piracy for US Exports, Jobs

WASHINGTON, June 15 /PRNewswire-USNewswire/ -- China's pervasive use of unlicensed software and discriminatory "indigenous innovation" policies hinder job-creating US exports and give Chinese companies an unfair competitive advantage over their American counterparts, Business Software Alliance President and CEO Robert Holleyman said today in testimony before the US International Trade Commission.

Click here for the full text of Holleyman's prepared testimony.

"The Chinese government's poor enforcement of intellectual property rights allows Chinese enterprises to illegally use US technologies with impunity, including billions of dollars worth of software developed by US companies," Holleyman said. "This translates directly into reduced revenues and fewer jobs in the US software sector. Illegal use of software also confers an unfair economic advantage on Chinese companies, who use such software to develop, manufacture and export a wide range of products more cheaply than their US competitors."

China has also moved aggressively to adopt a web of "indigenous innovation" policies that effectively exclude US software and other companies from broad segments of the Chinese market.

"By impeding the ability of US software and other firms to compete in China, these policies hurt US industries and US workers that rely on open markets abroad to grow and prosper here at home," said Holleyman. "Taken together, these problematic Chinese policies hinder job-creating US exports to China and unfairly bolster job-displacing imports from China."

Citing data from the market research firm IDC, Holleyman noted that nearly four out of every five copies of PC software installed in China in 2009 (79 percent) were not paid for, a piracy rate higher than that of any other major economy. The commercial value of that pirated software was $7.6 billion in 2009. Meanwhile, Chinese firms enjoy unfettered access to the US market.

Holleyman's testimony came on the first of two days of scheduled hearings for ITC investigations into the scope and US economic impact of IP infringement and indigenous innovation policies in China (USITC investigation nos. 332-514 & 332-519), which are being conducted at the behest of Congress.

Holleyman will be testifying before Congress on Wednesday, June 16 at a hearing of the Ways and Means Committee on China's Trade and Industrial Policies.

About BSA

The Business Software Alliance ( is the world's foremost advocate for the software industry, working in 80 countries to expand software markets and create conditions for innovation and growth. Governments and industry partners look to BSA for thoughtful approaches to key policy and legal issues, recognizing that software plays a critical role in driving economic and social progress in all nations. BSA's member companies invest billions of dollars a year in local economies, good jobs, and next-generation solutions that will help people around the world be more productive, connected, and secure. BSA members include Adobe, Altium, Apple, Autodesk, AVEVA, AVG, Bentley Systems, CA Technologies, Cadence, Cisco Systems, CNC/Mastercam, Corel, Dassault Systemes SolidWorks Corporation, Dell, HP, IBM, Intel, Intuit, Kaspersky Lab, McAfee, Microsoft, Minitab, PTC, Progress Software, Quark, Quest Software, Rosetta Stone, Siemens, Sybase, Symantec, Synopsys, and The MathWorks.